Despite numerous delays and obstacles, including the pandemic, Nigeria’s Dangote refinery has reportedly reached 85% operational capacity and is expected to hit 100% soon. Additionally, two other refineries, Port Harcourt and Warri, have resumed operations. These developments are significant for Nigeria and are expected to alter the country’s product import and crude export patterns. However, while some changes in trade flows are evident, they haven’t been as dramatic as anticipated, given the reported refining capacity, reports Gibsons.
Crude Oil
East (Middle East Gulf & Indo Region):
- VLCC: Softer sentiment at week’s end after a brief upturn. Strong activity early in the week, but weakness in other regions limits recovery potential. AG/China called at WS56.5 and AG/USG at WS31.
- Suezmax: Quiet market with a growing vessel list. Resistance at 140 x WS56.5 for modern tonnage. Owners may ballast to West Africa. Charterers aim to push East run rates towards or below 130 x WS100.
- Aframax (Indo Region): Northbound market saw two offers for an Aframax stem, covered at current levels. Late-decade demand emerged, and with list clean-up, rates are expected to be steady or firm next week. TD14 prints higher at WS115.
West Africa:
- VLCC: Improved cargo volume, but weak sentiment and Atlantic negativity led to slightly softer rates. East runs continue to dominate. WAF/East called at WS57.5.
- Suezmax: Slightly firmer feel, but prompt vessels need clearing. Owners aim to push TD20 above 130 x WS87.5, which is likely.
Mediterranean:
- Suezmax: Quiet open market, but some ships on subs. Owners aim to push TD6 rates back over WS100. Libya/Ningbo steady, owners seek around $5.4M.
- Aframax: Started strong, but rates declined due to limited activity and charterer pressure. WS122.5 secured for a standard Ceyhan voyage. Broader market weakness. Libya activity may offer relief, but overall outlook is challenging.
US Gulf/Latin America:
- VLCC: USG rates suffered a significant drop due to weak sentiment and geopolitical uncertainty. Recovery is unlikely without improvement in adjacent regions. Brazil exports were busier, but rates softened. USG/China was called at $7.3M, and Brazil/China at WS55.
- Aframax: Quieter week with limited inquiries. USG to UKC rates dropped nearly 20 points. More positions are expected, and sentiment is soft.
North Sea:
- Aframax: The market, but owners maintained resistance at WS110. Charterers may test this as the vessel list grows.
Clean Products
East:
- LR2: Flat market. TC1 steady at 75 x WS130. Westbound inquiry expected next week, driven by a $3.25m fixture on subs.
- LR1: Quiet week, but increased activity expected. TC5 needs retesting; assessed at 55 x WS137.5-140 for naphtha-suitable ships. AG/West assessed at $2.7m.
- MR: Slow start, but steady week overall. TC17 down to WS210, and TC12 down to WS150. Westbound rates need retesting.
UK Continent:
- MR: Volatile week due to tariff speculation. XUKC runs popular, with mixed TA run results (WS135-150). South American runs provided support. TC2 last done at 37 x WS140. Ballast tonnage could impact next week, but Mediterranean strength may divert some vessels.
- Handy: Weak week. XUKC softened to 30 x WS175. Outlook bleak, with potential for further rate declines.
Mediterranean:
- Handy: Busy week with firming rates. XMed started at 30 x WS145 and increased to 30 x WS185. Owners pushing for 30 x WS200.
- MR: Lackluster week. TC2 fell to 37 x WS135 after a prompt Sines/TA stem at 37 x WS195. Med/TA rates expected to correct to 37 x WS150.
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Source: Gibsons
